Are Americans Sacrificing Their Passports For Lower Taxes?

BanksA recent BBC news report suggests that more Americans are giving up their citizenship, so they can move to a lower tax jurisdiction and take residency there – and no longer need to report assets and earnings to the IRS (Inland Revenue Service).

Unlike citizens of other countries the U.S. uniquely taxes her citizens wherever they live, but do have a higher allowance for those who live abroad before taxation becomes applicable.

In the past Americans could use anonymous offshore bank accounts in Europe, Belize, Panama and the Caribbean to hide their money and avoid it being taxed, but after pressure from Washington many countries now disclose these accounts to the IRS – and opening a new account is problematic for Americans and almost certain to be reported.

To open a Monaco bank account for example increasingly requires disclosure to the IRS – but what many of the banks do is to get a new account holder sign a document declaring that they will in fact do this, transferring the responsibility to the individual concerned.

One avenue open to Americans to benefit personally from lower taxes is to change citizenship, and a BBC report recently indicates that this is becoming a more popular choice – but are the number of Americans seeking to do this significant?

Not to any significant degree according to International Property Tribune, who as well as Monaco deal with residency in Andorra.

While they receive a lot of enquiries still from Americans who hope to move to Monaco, it comes as a surprise to many of them that they won’t enjoy the tax benefits citizens of other countries enjoy, and while the news comes as a surprise it’s a rarity for it to be enough for individuals to start looking into giving up their American citizenship.

More often Tribune say they hear from Americans considering giving up their citizenship every four years in the run up to the Presidential elections, citing they are moving if one candidate or another gets elected. Bt they don’t follow through and learn to live with whoever becomes President in the same way most people do come election time in their respective countries.

With regards to how the real estate market is going to be affected by less Americans viewing Monaco as a tax advantageous country to move to, Tribune consider it to be of little consequence as the number of Americans buying property in Monaco has historically been a low proportion of the overall buying pot, with the UK, Ireland, Italy and Germany making up most buyers, with buyers from Russia adding to this over the last fifteen years.

Both rentals and those Monaco properties for sale reflect that the Principality has among the highest property prices in the world.

Visitors are often surprised at the prices. It’s not easy now to find a three bedroom apartment for rent for example at much less than 10,000 Euros a month. And for those considering buying prices start at over a million Euros for a studio apartment, with two bedroom ones starting at nearly three and a half million Euros for anything with a view and a car parking space in a good building.

For more information about opening a bank account in Monaco, the latest property and a free residency report visit www.banksinmonaco.com/

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